India-US Trade Pact: Boost for Labour-Intensive Exports

India's labour-intensive export sectors, including apparel, footwear, plastics, and home decor, stand to gain significantly in the US market, thanks to new tariff reductions by the United States under an interim trade pact. The agreement, announced on Saturday, aims to boost bilateral trade by reducing import duties on a variety of goods.

The framework of the first phase of this bilateral trade agreement involves a reduction of US tariffs on Indian goods from a punitive 25 percent to 18 percent. As part of the deal, goods like textiles, leather, footwear, and certain machinery will see reduced duties, enhancing their competitiveness. This reduction is particularly critical for sectors experiencing steep tariffs since August 27, which impeded export growth.

Indian industry bodies, including the Apparel Export Promotion Council and the Council for Leather Exports, have expressed optimism. They believe the elimination of tariffs will strengthen the global standing of Indian exports, ultimately boosting employment and sector growth. This interim agreement marks a vital step in restoring India's export competitiveness, particularly in its largest market—the United States.